India Morning Report: Markets cannot hold the 7950 levels

Or rather they want a secular trading range and one up move today could possibly end that as seen earlier, while we wait for the Economy improvements and growth pick up to show in consistent performance and investments. With FII flows now waiting for the bull run above the 8100 levels and not adding more moneys to the pile, the markets would likely  trundle down to below 7900 levels intraday or 7850 during the week before heading back up with bank buying because of its early rundown to 15200 levels last week making more upmoves likely for the secular market

Modi’s visit was of course a great difference maker and is part of his continuing investment in US diaspora which will certainly lend a great hands to right the US India investment flows and redefine the tilted ship on global waters in foreign relationships, India’s position in a US centric world and the Make in India dream, a motto worth exploring as the Services juggernaut hopefully returns to finance infrastructure and smoothen the growth kinks in India’s demographic run to 2050 to the top of the pile.

A traditional speculator in the market will continue to bundle real estate and infra stocks together in the immediate down tick and FMCG also has been at an indeterminate, indefensible high fueled by consumer spending optimism while the Central Bank holds back on rates and India debt starts becoming currency again among liquid Asian investors moving ten year yields down to 8.25% and 8% marks

YES Bank seems to be a simpler target in the meantime on shorts if markets indeed trend to a defined bottom of the new range to begin the secular up move, and ICICI Bank can (<10% probability) try and hit lower marks at 1350.

Gold may move down domestically given the global downtrend and 28000 prices are likely though the metal is even as defensive often positively correlated in up moves in the business cycle in the Indian markets while the CPI is apparently expectedly still moving slowly at just below 8 levels instead of trending down with the difference in baskets making trading its time dependency on the WPI untenable.

The afternoon pronouncements by S&P timed with Modi’s address in Madison Square Garden, is barely an olive branch if not continuing pressurising of India’s weak currency mechanics and ever slow investment flows as more pliable emerging markets suffer from the excesses of  dependence on trunk FDI flows from China and Europe.



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